Time Warner Cable to pay $1.9 million penalty

Time Warner Cable will pay $1.9 million to settle charges that it unfairly treated some customers based on black marks in their credit reports.

According to accusations from the Federal Trade Commission (FTC), the cable, phone and Internet company made some prospective customers put down a deposit or pay their first month’s bill ahead of time, depending on their credit histories. People with better credit were not subject to the same conditions. 

Different treatment for different customers is allowed under the law, but only if companies let customers know about what’s going on and double-check their credit reports. 

“Consumers have the right to know if they are paying more for something because of information in their credit report,” said Jessica Rich, head of the FTC’s consumer protection bureau, in a statement on Thursday. “Getting this notice gives you a right to a free copy of your report, so you can make sure everything on it is correct. Some of Time Warner Cable’s customers were missing out on this important right.”

The settlement is the FTC’s first since it finalized new regulations on pricing in 2011. 

According to the agency, the practice went on until at least March 2013.

Under the law, companies are allowed to use credit reports to make determinations about their customers, but they need to provide notices. The regulation is meant to ensure that consumers have the chance to protest potentially inaccurate credit reports. 

The FTC settlement will require Time Warner to keep and report records to make sure it’s complying with the rule in the future. 

A spokesman with the company told The Hill that it was "pleased to have resolved this matter so that we can focus all of our efforts on providing outstanding service to our customers."